Trends: The recently completed M50 has changed the shape, value and development of Dublin, write Joan Henry and Gerry McCarthy
The first section of the M50, a 47-kilometre motorway which provides a motorway route for much of the journey from Belfast to Rosslare, was opened in 1990 with the launch of the Western Parkway Motorway, which ran five and a half miles from Castleknock across the Westlink Bridge to the main Tallaght Road.
The process of building the M50 over the last 15 years coincided with a period of unprecedented economic growth, and has had a huge impact on the type of development and the value of the land in its path.
The performance of the economy coupled with historically low interest rates and the opening up of market sectors across Europe have highlighted both the significance and shortcomings of the M50 as it has progressed from phase to phase. For example, the Celtic Tiger has transformed the Irish consumer. Incomes and expectations have increased in line with the growth in employment - a tangible example is the fact that the number of new cars on the road has increased by almost 90 per cent since 1990. The process of building the M50 could never have kept up with the traffic congestion that the booming economy brought. 1990 traffic forecasts seemed extravagant but undershot considerably the actual numbers, with average daily volumes of over 75,000. The M50 project has had a significant impact on property prices in the areas along its path. Back in the late 1980s and early 1990s developers and owner-occupiers realised the benefits of acquiring sites with frontage and good motorway access. Lands fronting the motorway trebled in value within a year of opening the route, with larger parcels of land increasing at that time to over Ir£200,000 (€253,950) an acre. No one could have foreseen an increase to current values. A Hamilton Osborne King auction in July 1989 of a six-acre site in Ballymount, Dublin 12 set a new record price for industrial land in the area of Ir£187,500 (€238,000) per acre. An acre of land zoned for industrial use in the same area now costs over €1 million.
Just as happened in cities in the US and Europe, the M50 has sucked property development onto the motorway corridor - particularly near junctions - and has created prime sites for retailing, offices and industrial development. It kick-started the now very successful retail warehousing market, with retail warehousing rents increasing to Ir£8/£9 per sq ft (€10.15/€11.43 per sq ft) - double industrial rents. Prime rents on motorway junctions are now €350 per sq m (€32.50 per sq ft).
This final phase of the motorway has attracted particularly high quality investment to the surrounding area. For example, the Park Carrickmines, a major new urban centre, will open in September with an initial 16,000sq m (172,222sq ft) of fully let space. The total site opened up by the motorway is approximately 35 hectares. The anchor unit in the development is Woodies, and other major outlets will open later in the year. A further 5,000sq m (53,819sq ft) of retail space is scheduled to follow in Carrickmines along with high quality office space, and a hotel and leisure centre.
The completion of the M50 has had a positive impact on the demand for residential property in the surrounding areas, with Kilternan, Sandyford and Stepaside seeing spectacular growth. Price growth has been very strong - in some cases there has been up to a 20 per cent appreciation in less than 12 months.
The completion of the M50 is expected to alleviate the pressure caused by high volumes of traffic, particularly on the Leopardstown Road, and these improvements in turn will increase prices in the area and beyond the southside into Wicklow. Residential developments in the areas close to the last phase of the M50 have attracted buyers whose employment is located in a variety of areas, from local businesses to the airport and further north.
While critics may point to the traffic jams that have emerged at certain times of the day close to some interchanges, the project has had a hugely positive impact on the city and upgrading plans are already in place. Public transport, for example, will be catered for in the layout of the outer ring road currently under construction and will include a bus and cycle lane.
Hamilton Osborne King's professional services division handled the compulsory purchase negotiations for many of the landowners on the M50 route. Its CPO team headed by Gerry McCarthy is now working on the outer ring road, which will create further property opportunities.
Without the building of the M50, Dublin would not have been able to keep pace with the requirements of a rapidly expanding economy. The key questions now relate to the future and how accurate are predictions for our physical infrastructure requirements for 15 years time?
• Joan Henry is head of research and Gerry McCarthy is joint head of professional services at Hamilton Osborne King
